Bookkeeping Legal Issues for Small Business


Owning and running a small business is hard. There are lots of things to keep up with. You have to file taxes differently. You have to pay people if you are going to have employees. There are many legal issues you need to be aware of and avoid.

Tax Mistakes

Many people make mistakes on their taxes for their business. The process is exponentially more difficult than personal taxes you may be used.

They may not be required by the IRS, but they give you backup documentations for any deductions you claim. Keep a folder for the receipts. Honestly, you should go to a bookkeeper to assist in your ongoing business operations, there are many different small business bookkeeping services that you can make use of that will help you avoid excess work and focus on your core business (they are very difficult to do on your own). They can also do the job quickly and efficiently. Also, remember to track any expenses you can be reimbursed for.

You really need to keep good, detailed books of all money exchanged. This will make tax time much easier. The books will become more difficult as your business grows. Make sure you keep up with business regulations that affect you.

Partner Agreement

If you decide to take on a business partner, make a good, strong partner agreement. This can cause a lot of trouble if things go south between you and your partner. The agreement should cover several things. Include your goals for the business. Outline what happens if one partner doesn’t comply with the rules. Include a section on selling the business to outline what happens if either of you want to ever sell the business. Outline how much money each partner makes. Outline the role(s) and responsibilities of each partner.

Potential Legal Troubles

Many small businesses fail to set up the right legal structure for their company. It can open you up to liability if you don’t. You also need to have a shareholders’ agreement if you sell shares. You also need human resource guidelines if you have employees. You can get in trouble if you don’t have a handbook. You need specific guidelines for your employees’ jobs. Keep up with all of the laws surrounding employees. Decide if you want your employees to sign non-disclosure agreements or anything similar. Do not, do not, talk trash about your competition. Don’t do it publicly or anonymously. Be careful not to commit libel against them. Also, it just looks bad as well. You can compete civilly. If you have created something with this company, you should get patents or copyrights or trademarks. Keep your work your own. Be very careful if you are dealing with users’ information online as well. This can cause chaos if you get hacked.

When starting a business, make sure that you do plenty of planning before leaping into it. Make sure you are ready to take on the responsibility of a legal entity. Decide early on if you want to have employees or not. If you take on a partner, make an agreement between the two of you. Enjoy being your own boss and the freedom that entails.


Question About Divorce Law in California

Dear Law Guy, When I married my husband, I was a little overweight, he was quite trim. Now I’m slim, and he’s put on the pounds and I want a divorce. I used to think he was the best I could do, but now I’m a brand new babe in the Bay Area and I want to see what I’m worth, if you know what I mean.   What’s the quickest way to get a divorce?

First off, because divorce, like marriage, is subject to state law, you should check whatever information I’m about to give you with a divorce lawyer in Oakland who will naturally be more tuned in to the particulars of divorce law in your home state. in California, all divorces are “no fault” divorces, which means you can request a divorce without claiming your spouse has done something wrong. (Be happy you don’t live in the 1800’s. Back then you could only get a divorce in California if your husband were impotent, extremely cruel, had deserted or neglected you, was habitually intemperate, committed fraud or adulter, or had been convicted of a felony.) You, as the first to file, would be the “Petitioner,” and your husband would be the “Respondent,” but the distinction is not that curcial. Divorce in California need not be mutual, meaning either spouse can file and obtain a divorce without the cooperation of the other spouse. You asked about the “quickest way to get a divorce.” No matter what, it will take at least six months for your divorce to be finalized. That’s the mandatory waiting period. If you want your divorce to actual become final as the six-month waiting period passes, you will want to settle your divorce case and implement the terms of your settlement within that time frame. Most divorces do not happen that quickly. In fact, they typically take a lot longer than the minimum six months. You can explain your situation to a lawyer – which with all due respect may or may not inspire them to work quickly. But even if it takes a while, you ought to be thankful that California divorce law is relatively simply. The default grounds for dissolution of marriage are “irreconcilable difference,” which are accepted as true at the word of just one spouse. If I were you, I might not go into detail about your superficial reasons for seeking the divorce, so as not to risk trying the patience of the judge. The other major piece of advice I’d give is to stay as civil as possible with your husband. While on the one hand he has no way of ultimately blocking the divorce, he can certainly drag it out considerably and make it much less pleasant. So, as much as possible, try not to make it personal. You might also think about what you’re willing to accept in terms of a divorce settlement. As the Petitioner, you have more of an incentive to accept a settlement which favors your spouse. He, or rather his lawyer, will be well aware of that, and may use that to chisel you.

Never say never

My excitement about Blakely’s impact on the Federal Sentencing Guidelines was tamped down by my sense that the federal judges in my district seemed to like the guidelines most of the time.  Departures were rare except for “substantial assistance” situations and it often felt as though upward departures were more common.
In a sentencing this week, a client received a non-guideline “reasonable” sentence that would have been reversible when the guidelines were not advisory.  There were solid named grounds for departure under the Guidelines for aberrant behavior

and lesser harms.  Without considering any departures though the guideline range for my client was 24-30 months.  The judge sentenced him to one year and a day.

My first clue that this was an unusual case was when one of the Deputy Marshals in the courtroom at an early hearing thought that my client should never have been charged.  The sentence was firm but fair, a year in prison is a lot for someone who has never had a real brush with the law before.  Even though I think guideline sentences will be the norm here, it is good to have a safety valve.
The Law Guy